Abstract

There have been many claims that the Internet will revolutionise the way organisations do business. Though the Internet is increasingly encroaching on every facet of business life, the evidence for its transformative powers is still weak. However, there is one business sector where it does appear to be creating a revolution: the music industry. As this article will show, the Internet is radically transforming that industry's supply chain. Aided by the advent of peer-to-peer music-swapping technologies and the emergence of organisations such as Napster, the Internet is also opening up the industry to piracy on a scale never seen before and thereby threatening the traditional dominance of the big record labels in the global music market. Therefore, the internet is not just speeding up transactions and reducing costs; through the scale and nature of the piracy it has facilitated, it is also challenging the power of the big record labels and threatening to transform the entire structure of the industry.